EXHIBIT 10.23
EMPLOYMENT AGREEMENT
The parties to this Employment Agreement (the "AGREEMENT") are Xxxxxx Xxxx
(the "EXECUTIVE"), residing at 00 Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and
ORBCOMM Inc. (the "COMPANY"), a company organized under the laws of Delaware,
with principal offices located at 0000 Xxxxxxx Xxxxxx, Xxxx Xxx, XX 00000.
The Company desires to provide for the Executive's employment by the
Company, and the Executive desires to accept such employment under the terms and
conditions contained herein, and the parties hereto have agreed as follows:
1. EMPLOYMENT. The Company shall employ the Executive, and the
Executive shall serve the Company, as Executive Vice President - International,
with duties and responsibilities compatible with that position. The Executive
agrees to devote his full business time, attention, skill, and energy to
fulfilling his duties and responsibilities hereunder; provided that the
Executive may (a) serve on corporate, civic, educational, philanthropic, or
charitable boards or committees, (b) deliver lectures, fulfill speaking
engagements, or teach at educational institutions, and (c) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's duties and responsibilities hereunder and do not
violate Section 6 below. The Executive's services shall be performed principally
at the Company's Fort Xxx, New Jersey office. The Executive understands and
acknowledges that he will be required to travel periodically to the Company's
offices in Dulles, Virginia.
2. TERM OF EMPLOYMENT. The Executive's employment under this
Agreement commenced as of August 2, 2004 (the "START DATE") and shall continue
through August 1, 2007, unless sooner terminated pursuant to the provisions of
Section 4 (the "TERM"). The parties hereto may extend the Term by a written
agreement, signed by both parties, that specifically references this Agreement.
Upon the natural expiration of the Term (or any extended Term), the Executive's
employment will become "at-will" and will be terminable by either party hereto
for any reason not prohibited by law or for no reason, and with or without
notice.
3. COMPENSATION. As full compensation for the services provided
under this Agreement, the Executive shall be entitled to receive the following
compensation during the Term:
(a) Base Salary. The Executive shall be entitled to receive an
annual base salary (the "BASE SALARY") of $220,000. Upon each anniversary of the
Start Date, the Base Salary may be increased by the Company in its sole
discretion. Base Salary payments hereunder shall be made in arrears in
substantially equal installments (not less frequently than monthly) in
accordance with the Company's customary payroll practices for its other
executives, as those practices may exist from time to time.
(b) Bonus. For each calendar year, the Executive shall also be
eligible to receive a discretionary bonus (the "BONUS") in an amount, if any,
determined by the Company in its sole discretion. In order to receive such a
Bonus, if any, the Executive must be actively employed by the Company on the
date on which such Bonus is scheduled to be paid to the Executive.
Notwithstanding the foregoing, in the event that the Company meets or exceeds
its "100% performance goals" for any given year, as established by the Board
and/or its Compensation Committee for that year, then the Company agrees to make
a recommendation to the Compensation Committee of the Board that the Executive's
bonus for such year be equal to at least 50% of his then-current Base Salary.
The Executive acknowledges that such recommendation is not binding upon the
Board and/or its Compensation Committee and is not a guaranty of a specific
bonus amount for any given year.
(c) Employee Benefits. The Executive shall be entitled to receive
Company-paid medical and disability insurance, Company-paid term life insurance
(which shall provide for a death benefit payable to the Executive's
beneficiary), Company-paid holiday and vacation time (such vacation time to be
not less than 20 business days per calendar year and pro-rated for partial years
of employment), and other Company-paid employee benefits (collectively,
"EMPLOYEE BENEFITS"), on a basis, as to each such benefit, no less favorable
than that generally provided to similarly situated employees of the Company or
any of its subsidiaries. In addition, the Executive shall be entitled to
participate in any qualified or non-qualified profit sharing plan and/or pension
plan generally provided for the executives of the Company or any of its
subsidiaries, on a basis no less favorable than that generally provided to
similarly situated executives of the Company or any of its subsidiaries.
Notwithstanding the foregoing, the Company reserves the right to amend, modify,
or terminate, in its sole discretion and consistent with applicable law, any
Employee Benefit and any Employee Benefit plan, program or arrangement provided
to employees and/or executives in general.
(d) Equity Plan Participation. The Executive shall be entitled to
participate in any equity option plan or restricted equity plan, or other
equity-based compensation plan or arrangement, established by the Company in
which the Company's executives generally are permitted to participate. The terms
and conditions of the Executive's participation in, and/or any award under, any
such plan shall be in accordance with the applicable controlling plan document
and/or award agreement.
Conditioned upon his execution of this Agreement, the Executive was
awarded on December 3, 2004 an option to purchase 125,000 shares of the
Company's Common Stock, par value $0.001 (the "Option"), with an exercise price
equal to $2.84 per share. The Option are subject to the terms and conditions of
the stock option agreement attached hereto as Exhibit A, which stock option
agreement will be executed by the Executive concurrently with this Agreement.
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(e) Expenses. The Company shall reimburse the Executive for all
reasonable expenses incurred by him in connection with the performance of his
duties under this Agreement, upon his presentation of appropriate vouchers
and/or documentation covering such expenses. Without limiting the generality of
the foregoing, the Company shall reimburse the Executive for all reasonable
transportation, lodging, food, and other expenses incurred by him in connection
with traveling on Company business, including for the Executive's reasonable
travel and lodging expenses related to his periodic travels to the Company's
Virginia offices.
(f) Automobile. The Company shall provide the Executive with an $800
per month automobile allowance. This allowance will be paid on a monthly basis
and is in lieu of any reimbursement to you by the Company for the business use
of your vehicle.
(g) Withholdings. All payments made under this Section 3, or any
other provision of this Agreement, shall be subject to any and all federal,
state, and local taxes and other withholdings to the extent required by
applicable law.
4. TERMINATION OF EMPLOYMENT.
(a) Disability. If the Executive shall be unable to perform his
essential duties under this Agreement on account of a physical or mental
disability, with or without reasonable accommodation, for one hundred eighty
(180) calendar days during any twelve (12) month period or for one hundred (120)
consecutive calendar days, then the Company may, by notice to the Executive,
terminate his employment under this Agreement as of the date of the notice. Any
such termination shall be made only in accordance with applicable law.
(b) Death. The Executive's employment under this Agreement shall
terminate automatically upon his death.
(c) Termination by the Company. The Company shall have the right,
exercisable at any time in its sole discretion, to terminate the employment of
the Executive for any reason whatsoever with or without "cause" (as defined
below); provided that the Company must provide the Executive with at least one
(1) month of advance written notice of its decision to terminate the Executive
without cause. The Company reserves the right to remove any and all duties from
the Executive and exclude him from the Company's premises during the notice
period. The Executive's employment shall not be deemed to have been terminated
with "cause" unless he shall have received written notice from the Company at or
prior to the termination of employment advising him of the specific acts or
omissions alleged to constitute "cause" and, in the case of those acts or
omissions that are reasonably capable of being corrected, those acts or
omissions continue uncorrected after he shall have had a reasonable opportunity
(not to exceed fifteen (15) calendar days) to correct them.
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As used in this Agreement, termination with "CAUSE" shall mean only
the Executive's involuntary termination by the Company for reason of (i) the
Executive's breach of a fiduciary duty of loyalty owed to the Company or any of
its subsidiaries, which breach has caused material harm to the Company or any of
its subsidiaries, (ii) the Executive's conviction of or plea of guilty or no
contest to (I) a crime involving moral turpitude that leads to material adverse
publicity or material harm to the Company, or (II) any felony, (iii) the
Executive's gross negligence or willful misconduct (including, without
limitation, embezzlement) in the performance of his duties, (iv) the Executive's
material breach of this Agreement, or (v) conduct by the Executive beyond the
scope of his authority as an officer and employee of the Company, which conduct
was not known in advance by the Company's Chief Executive Officer and which
conduct results in any governmental department or agency terminating or revoking
any governmental license of the Company or any subsidiary of the Company.
(d) Termination by the Executive. The Executive shall have the right
to terminate his employment with the Company with or without "good reason" (as
defined below), provided that he provides the Company with at least two (2)
months of advance written notice of his decision to terminate his employment
without "good reason." Upon the receipt of such notice from the Executive
terminating his employment without good reason, the Company may withdraw any and
all duties from the Executive and exclude him from the Company's premises during
the notice period. The Executive's employment shall not be deemed to have been
terminated with "good reason" unless he shall have provided written notice to
the Company (either to the Chief Executive Officer or Board of Directors of the
Company) advising the Company of the specific acts or omissions alleged to
constitute "good reason" and those acts or omissions continue uncorrected after
the Company shall have had a reasonable opportunity (not to exceed thirty (30)
calendar days) to correct them.
As used in this Agreement, termination with "GOOD REASON" shall mean
only the Executive's voluntary termination of his employment with the Company
following (i) a significant diminution by the Company of the scope of the
Executive's duties and responsibilities, including a diminution in title, (ii) a
material reduction in the Executive's Base Salary, or (iii) the Company's
material breach of this Agreement.
(e) Severance. If, during the Term, the Company shall terminate the
Executive's employment without "cause" pursuant to Section 4(c) above or the
Executive shall terminate his employment with "good reason" pursuant to Section
4(d) above, then, upon the Executive's execution of the Release attached hereto
as Exhibit B (the "Release"), the Executive shall be entitled (i) to continue to
receive as severance payments Base Salary compensation under Section 3(a) above,
payable in accordance with the Company's periodic payroll schedule, for the
greater of (I) the remainder of the Term or (II) six (6) months and (ii)
provided that previously established Company performance goals or objectives are
met for the calendar year in which the Executive's termination of employment
occurs, to receive a pro rata portion of his Bonus under Section 3(b) above for
the calendar year in which his termination of employment occurs, such
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pro-rata Bonus to be paid on March 30th of the calendar year following the
calendar year in which the Executive's termination of employment occurs. The pro
rata Bonus will be calculated by multiplying the amount of the Bonus that the
Executive would have received for that calendar year had his employment not been
terminated by a fraction, the numerator of which is the number of calendar days
the Executive was employed by the Company during that calendar year and the
denominator of which is 365.
Notwithstanding the forgoing, the Executive shall remain entitled to
receive any compensation and benefits to which he is specifically entitled under
any other plan, policy, or arrangement of the Company (including, but not
limited to, Employee Benefits, profit sharing and pension benefits, and the
Option), and shall remain entitled to be reimbursed pursuant to Section 3(e) for
any expenses properly incurred in accordance with such Section 3(e) prior to his
employment termination (collectively, the "Accrued Obligations"). Subject only
to the Executive's delivery of the Release, the Company's obligation under this
Section 4(e) shall be absolute and unconditional, and the Executive shall be
entitled to such severance payments regardless of the amount of compensation the
Executive may earn or be entitled to with respect to any other employment he may
obtain during the period for which severance payments are payable.
If the Executive's employment with the Company is terminated
pursuant to Sections 4(a) or 4(b) above, if the Company terminates the
Executive's employment with "cause" pursuant to Section 4(c) above, or if the
Executive terminates his employment without "good reason" pursuant to Section
4(d) above, then the Executive shall not be entitled to any further payments
under this Agreement, including Base Salary, Bonus, Employee Benefits, or
Severance, except that the Executive shall be entitled to the Accrued
Obligations, payable no later than 30 days following the Executive's termination
of employment unless the plan, policy, or arrangement specifically provides for
an alternative payment date or schedule, in which case that alternative payment
date or schedule will control.
5. MERGER OR SALE OF ASSETS. If the Company shall merge or
consolidate with another corporation or other entity, or shall transfer all or
substantially all of its assets to another person, corporation, or other entity,
then the Executive shall be entitled to Severance in accordance with Section
4(e) as if his employment were terminated by the Company without "cause," unless
such successor or transferee person, corporation, or entity assumes this
Agreement and continues the Executive's employment hereunder.
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6. OBLIGATIONS OF THE EXECUTIVE.
(a) Protectable Interests of the Company. The Executive acknowledges
that he has and will continue to play an important role in establishing the
goodwill of the Company and its related entities, including relationships with
clients, employees, and suppliers. The Executive further acknowledges that over
the course of his employment with the Company, he has and will continue to (i)
develop special relationships with clients, employees, and/or suppliers, and/or
(ii) be privy to Confidential Information (as defined below). As such, the
Executive agrees to the restrictions below in order to protect such interests on
behalf of the Company, which restrictions the parties hereto agree to be
reasonable and necessary to protect such interests.
(b) Non-Competition. During the Executive's employment and for the
one (1) year period immediately thereafter, the Executive shall not, anywhere in
the world, whether directly or indirectly, for himself or for any third party:
(i) engage in any business activity; (ii) provide professional services to
another person or entity (whether as an employee, consultant, or otherwise); or
(iii) become a partner, member, principal, or stockholder in any entity; and in
each such case, that is in competition with the Business. For purposes of this
Section 6(b) and Section 6(c) below, "Business" shall mean the business of
offering data communication services via low-Earth orbit satellites, or any
other business which constitutes a material portion of the business of the
Company immediately preceding the Executive's termination of employment. The
Executive acknowledges and understands that, due to the global nature of the
Company's business and the technological advancements in electronic
communications around the world, any geographic restriction of the Executive's
obligation under this Section 6(b) would be inappropriate and counter to the
protections sought by the Company hereunder.
(c) Non-Solicitation. During the Executive's employment and for the
one (1) year period immediately thereafter, the Executive shall not, anywhere in
the world, whether directly or indirectly, for himself or for any third party:
(i) solicit any business or contracts, or enter into any business or contract,
directly or indirectly, with any suppliers, licensees, customers, or partners of
the Company that (A) was a supplier, licensee, customer, or partner of the
Company at, or within six (6) months prior to, the termination of Executive's
employment, or (B) was a prospective supplier, licensee, customer, or partner of
the Business, with whom the Company was actively discussing entering into a
business relationship, at the time of the Executive's termination of employment,
and in either case, for purposes of engaging in an activity that is in
competition with the Business; or (ii) solicit or recruit, directly or
indirectly, any of the Company's or its subsidiaries' employees, or any
individuals who were employed by the Company's or its subsidiaries' within six
(6) months prior to the termination of the Executive's employment, for
employment or engagement (whether as an employee, consultant, or otherwise) with
a person or entity involved in marketing or selling products or services
competitive with the Business. The Executive acknowledges and understands that,
due to the
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global nature of the Company's business and the technological advancements in
electronic communications around the world, any geographic restriction of the
Executive's obligation under this Section 6(c) would be inappropriate and
counter to the protections sought by the Company hereunder. Notwithstanding the
foregoing, at all times following the termination of his employment with the
Company, the Executive will be entitled to solicit or enter into contracts with
any other person or entity to provide for any product or service that is not
competitive with the Business.
(d) Confidential Information. The Executive acknowledges that,
during the course of his employment with the Company, he has had and will
continue to have access to information about the Company, and its clients and
suppliers, that is confidential and/or proprietary in nature, and which belongs
to the Company. As such, at all times, both during the Term and thereafter, the
Executive will hold in the strictest confidence, and not use or attempt to use
except for the benefit of the Company, and not disclose to any other person or
entity (without the prior written authorization of the Company) other than in
the performance of his duties and responsibilities hereunder, any Confidential
Information (as defined below). Notwithstanding anything contained in this
Section 6(d), the Executive will be permitted to disclose any Confidential
Information to the extent required by validly issued legal process or court
order, provided that the Executive notifies the Company immediately of any such
legal process or court order in an effort to allow the Company to challenge such
legal process or court order, if the Company so elects, prior to the Executive's
disclosure of any Confidential Information.
For purposes of this Agreement, "CONFIDENTIAL INFORMATION" means any
confidential or proprietary information which belongs to the Company, or any of
its clients or suppliers (provided that such information regarding the Company's
clients or suppliers was disclosed to the Executive during the course of his
employment with the Company), including without limitation, technical data,
market data, trade secrets, trademarks, service marks, copyrights, other
intellectual property, know-how, research, business plans, product information,
projects, services, client lists and information, client preferences, client
transactions, supplier lists and information, supplier rates, software,
hardware, technology, inventions, developments, processes, formulas, designs,
drawings, marketing methods and strategies, pricing strategies, sales methods,
financial information, revenue figures, account information, credit information,
financing arrangements, and other information disclosed to the Executive by the
Company or otherwise obtained by the Executive during the course of his
employment, directly or indirectly, and whether in writing, orally, or by
electronic records, drawings, pictures, or inspection of tangible property.
"Confidential Information" does not include any of the foregoing information
which has entered the public domain other than by a breach of this Agreement.
(e) Return of Company Property. Upon the termination of the
Executive's employment with the Company (whether upon the expiration of the Term
or otherwise), or at any time during such employment upon request by the
Company, the Executive will promptly deliver to the Company and not keep in his
possession, recreate, or deliver to any other person or entity,
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any and all property which belongs to the Company, or which belongs to any other
third party and is in the Executive's possession as a result of his employment
with the Company, including without limitation, computer hardware and software,
palm pilots, pagers, cell phones, other electronic equipment, records, data,
client lists and information, supplier lists and information, notes, reports,
correspondence, financial information, account information, product information,
files, and other documents and information, including any and all copies of the
foregoing; but not including the Executive's personal contact list developed
apart from his provision of services to the Company.
(f) Ownership of Property. The Executive acknowledges that all
inventions, innovations, improvements, developments, methods, processes,
programs, designs, analyses, drawings, reports and all similar or related
information (whether or not patentable) that relate to the Company's or any of
its affiliates' actual or anticipated business, research, and development, or
existing or future products or services, and that are conceived, developed,
contributed to, made, or reduced to practice by Executive (either solely or
jointly with others) while engaged by the Company or any of its affiliates
(including any of the foregoing that constitutes any Confidential Information)
("WORK PRODUCT") belong to the Company or such affiliate, and the Executive
hereby assigns, and agrees to assign, all of the above Work Product to the
Company or such Affiliate.
(g) Judicial Modification. The Executive acknowledges that it is the
intent of the parties hereto that the restrictions contained or referenced in
this Section 6 be enforced to the fullest extent permissible under the laws of
each jurisdiction in which enforcement is sought. If any of the restrictions
contained or referenced in this Section 6 is for any reason held by a court to
be excessively broad as to duration, activity, geographical scope, or subject,
then such restriction shall be construed or judicially modified so as to
thereafter be limited or reduced to the extent required to be enforceable in
accordance with applicable law.
(h) Equitable Relief. The Executive acknowledges that the remedy at
law for his breach of this Section 6 will be inadequate, and that the damages
flowing from such breach will not be readily susceptible to being measured in
monetary terms. Accordingly, upon a violation of any part of this Section 6, the
Company, upon such showing as may be required by a court, shall be entitled to
immediate injunctive relief (or other equitable relief) from any court with
proper jurisdiction and may obtain a temporary order restraining any further
violation. Nothing in this Section 6(h) shall be deemed to limit the Company's
remedies at law or in equity for any breach by the Executive of any of the parts
of this Section 6 which may be pursued or availed of by the Company.
7. ARBITRATION. Except as provided in Section 6(h) above, any
dispute or controversy between the parties hereto, whether during the Term or
thereafter, relating to this Agreement and the Executive's employment with the
Company and the cessation thereof shall be
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settled by arbitration administered by the American Arbitration Association
("AAA") in New York, New York pursuant to the AAA's National Rules for the
Resolution of Employment Disputes (or their equivalent), which arbitration shall
be confidential, final, and binding to the fullest extent permitted by law. The
parties agree to waive their right to a trial by jury and agree that they will
not make a demand, request or motion for a trial by jury or court. This
agreement to arbitrate shall be binding upon the heirs, successors, and assigns
and any trustee, receiver, or executor of each party. A party shall initiate the
arbitration process by delivering a written notice of such party's intention to
arbitrate to the other party at the address set forth above. There shall be one
arbitrator. The parties shall select an arbitrator by mutual agreement within
thirty (30) days after the written notice of intention to arbitrate is received.
If the parties fail to select an arbitrator by mutual agreement, the party
seeking arbitration shall notify the AAA of the demand for arbitration and
obtain a list of arbitrators from the AAA's Employment Dispute Resolution
Roster. If the parties fail to agree on an arbitrator, the AAA Administrator or
his/her delegate shall select an arbitrator, who is a member of the AAA's
Employment Dispute Resolution Roster. The arbitrator shall have the authority to
resolve all issues in dispute, including the arbitrator's own jurisdiction, and
to award compensatory remedies and other remedies permitted by law. The
arbitrator shall decide the matters in dispute in accordance with the governing
law provisions of this Agreement, except that the parties agree that this
agreement to arbitrate shall be governed by the Federal Arbitration Act, 9
U.S.C. Section 1, et seq. The award of the arbitrator shall be final and shall
be the sole and exclusive remedy between the parties regarding any claims,
counterclaims, issues, or accountings. Each party hereto shall be responsible
for paying its own attorneys' fees and costs incurred in connection with any
dispute between the parties, except as may otherwise be provided by the
arbitrator in applying the substantive law applicable to the dispute between the
parties hereto. To the extent inconsistent with the form of arbitration
agreement that the Company's employees generally are required to enter into,
including the Executive, this arbitration provision shall control. Otherwise, to
the extent compatible, effect shall be given to both this arbitration provision
and the Company's form of arbitration agreement that the Executive will be
required to execute.
8. MISCELLANEOUS.
(a) Notices. Any notice or other communication under this Agreement
shall be in writing and shall be considered given when delivered personally or
five (5) days after mailed by registered mail, return receipt requested, or one
(1) business day after deposit with a nationally recognized overnight delivery
service with instructions to deliver the next business day, to the Executive and
the Company at their respective addresses set forth above (or at such other
address as a party may specify by notice to the other).
(b) Entire Agreement; Amendments. This Agreement (in addition to any
stock option agreement entered into by the parties hereto, and any written
benefit or compensation plan or policy in which the Executive participates, if
any) contains a complete statement of all of the arrangements between the
Executive and the Company with respect to the
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employment of the Executive by the Company and the Executive's compensation for
such employment, and supersedes all previous agreements, arrangements and
understandings, written or oral, relating thereto. This Agreement may not be
amended except by a written agreement signed by the Company and the Executive.
(c) Severability. In the event that any provision of this Agreement,
or the application of any provision to the Executive or the Company, is held to
be unlawful or unenforceable by any court or arbitrator, then the remaining
portions of this Agreement shall remain in full force and effect and shall not
be invalidated or impaired in any manner.
(d) Waiver. No waiver by any party hereto of any breach of any term
or covenant in this Agreement, whether by conduct or otherwise, in any one or
more instances, shall be deemed to be or construed as a further or continuing
waiver of any such breach, or a waiver of any other term or covenant contained
in this Agreement.
(e) Governing Law. This Agreement shall be governed by and construed
in accordance with the law of the State of New Jersey without regard to its
conflict of laws principles.
(f) Indemnification. The Executive shall be entitled to
indemnification in accordance with the Company's Amended and Restated
Certificate of Incorporation and Amended and Restated By-Laws.
IN WITNESS WHEREOF, the parties hereto have executed this document
as of the 6th day of April, 2005.
ORBCOMM Inc. XXXXXX XXXX
By: /s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxx Xxxx
---------------------------- ------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
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EXHIBIT A -- STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT
AGREEMENT (this "Agreement") entered into as of the 3rd day of
December, 2004 by and between ORBCOMM Inc., a Delaware corporation (the
"Company"), and Xxxxxx Xxxx (the "Employee").
WHEREAS, pursuant to the ORBCOMM Inc. Stock Option Plan (the
"Plan"), the Company's Board of Directors grants to the Employee 125,000 options
to acquire shares of Common Stock, par value $0.001 per share, of the Company
("Shares") conditioned upon the Employee entering into an employment agreement
with the Company;
WHEREAS, the Employee in entering into the employment agreement with
the Company to which this Agreement is attached (the "Employment Agreement") and
the Employee desires to accept the option subject to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Company and the Employee,
intending to be legally bound, hereby agree as follows:
1. Grant of Option. On the terms and conditions hereinafter set
forth, the Company hereby grants to the Employee an option to purchase all (or
any part) of 125,000 Shares (the "Option"). This Option is granted on December
3, 2004 (the "Grant Date"). The Option is intended to be an Incentive Stock
Option. This Option is granted pursuant to the Plan, and is governed by the
terms and conditions of the Plan. All defined terms used herein, unless
specifically defined in this Agreement, have the meanings assigned to them in
the Plan.
2. Exercise Price. The exercise price (the "Exercise Price") for the
Shares covered by the Option will be $2.84.
3. Time of Exercise of Option.
(a) The Option will become exercisable as follows:
(i) 25,000 options will be exercisable immediately;
(ii) the remaining 100,000 options will be exercisable at the
rate of 6,250 options per calendar quarter as of the last day of the calendar
quarter coincident with or immediately following the Grant Date, until all of
the Option will be exercisable on the last day of the calendar quarter
immediately preceding or coincident with the fourth anniversary of the Grant
Date.
(b) Notwithstanding any other provision of this Agreement to the
contrary, the Option will become immediately fully exercisable (i) on the date
of any Change of Control (as
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defined in the Plan), or (ii) upon the natural expiration of the term of the
Employment Agreement on August 1, 2007 if the Company shall have not offered to
extend the term of the Employment Agreement for at least one additional year
upon terms and conditions no less favorable to the Employee, in the aggregate,
than those set forth in the Employment Agreement, in each case without regard to
the satisfaction of any time-based criteria.
(c) Notwithstanding any other provision of this Agreement to the
contrary, upon a termination of the Employee's employment with the Company
without "cause" or with "good reason" (as those terms are defined in the
Employment Agreement), an additional 25,000 options will become fully
exercisable upon such termination of employment (or, if fewer than 25,000
options hereunder are not yet exercisable at the time of such employment
termination, then such fewer number of options will become fully exercisable
upon such termination of employment).
4. Term of Options.
(a) The Option will expire 10 years from the date hereof, but will
be subject to earlier termination as provided below.
(b) Upon ceasing to be an Employee,
(i) the unexercisable portion of the Option hereby granted
will terminate on the date of such termination of employment.
(ii) the exercisable portion of the Option hereby granted will
be treated as follows:
(A) Subject in each case to the repurchase rights
described in Paragraph 5 below and the Shareholders' Agreement (defined below),
if the Company terminates the Employee for any reason except for "cause" (as
defined in the Employment Agreement), or if the Employee voluntarily ceases to
be an employee, or if the Employee dies or his employment is terminated because
he is Disabled, the exercisable portion of the Option hereby granted will be
exercisable for ninety (90) days following the termination of employment.
(B) If the Employee is terminated for Cause, the
exercisable portion of the Option hereby granted will terminate on the date of
such termination of employment.
(iii) For purposes of this Agreement, "Disabled" means, the
Employee is terminated due to "Disability" within the meaning of Code
Section 22(e).
(c) If the aggregate Fair Market Value (determined on the date the
Option is granted) of a Share subject to an Incentive Stock Option which is
exercisable for the first time during any calendar year exceeds $100,000, then
the portion of the Incentive Stock Option in excess of the $100,000 limitation
will be treated as a Non-Statutory Stock Option.
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5. Repurchase Rights.
(a) The Company has the right to repurchase the Shares acquired upon
the exercise of Options for a period of three months after the Employee
terminates employment or three months after the Shares for which the Option is
exercised are acquired, whichever is later. The purchase price per Share payable
is as follows:
(i) if the Employee's employment ends because the Employee is
terminated by the Company for "cause" (as defined in the Employment Agreement),
the amount equal to the lesser of: (A) the Fair Market value of the Shares at
the time of the termination of employment; and (B) the Exercise Price; or
(ii) if the Employee's employment ends for any other reason
(death, termination without Cause, because the Employee is Disabled, or
voluntary resignation by the Employee), the amount equal to the greater of: (A)
the Fair Market Value of the Shares at the time of the termination of
employment; and (B) the Exercise Price.
6. Manner of Exercise of Option. The Option may be exercised by
delivery, via first class mail, interoffice mail, fax or electronic mail of a
Notice of Option Exercise and related forms to the Company stating the number of
Shares with respect to which the Option is being exercised and accompanied by
payment of an amount equal to the Exercise Price multiplied by the number of
Shares being purchased pursuant to the Option (the "Total Exercise Cost") in
cash or by check, bank draft or money order payable to the order of the Company
or, subsequent to an Initial Public Offering, (i) through the delivery to the
Company of Shares of Common Stock with an aggregate Fair Market Value on the
date of exercise equal to the Total Exercise Cost, subject to such limitations
and prohibitions as the Committee may adopt from time to time or (ii) through
the delivery to the Company of an Authorization for Exercise of Options
"Cashless" Exercise Form with irrevocable instructions to a broker to deliver
promptly to the Company an amount equal to the Total Exercise Cost, subject to
such limitations as the Committee may adopt from time to time or by any
combination of the above methods of payment.
7. Non-Transferability. The right of the Employee to exercise the
Option (as and when exercisable) may not be assigned or transferred by the
Employee other than by will or the laws of descent and distribution. The Option
may be exercised and the Shares may be purchased during the lifetime of the
Employee only by the Employee (or the Employee's legal representative in the
event that the Employee's employment is terminated due to becoming "Disabled"
within the meaning of Section 4(b)(iii) of this Agreement). Any attempted
assignment or transfer, except as hereinabove provided, including without
limitation any purported assignment, whether voluntary or by operation of law,
pledge, hypothecation or other disposition contrary to the provisions hereof, or
any levy of execution, attachment, trustee process or similar process, whether
legal or equitable, upon the Option, will in each instance be null and void.
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8. Representation Letter and Investment Legend.
(a) In the event that for any reason the issuance of the Shares to
be issued upon exercise of an exercisable Option will not be effectively
registered under the Securities Act of 1933, as amended (the "1933 Act"), upon
any date on which the Option is exercised, the Employee (or the person
exercising the Option pursuant to Section 6) will give a written representation
to the Company in the form attached hereto as Exhibit A, and the Company will
place the legend described in Exhibit A, upon any certificate for the Shares
issued by reason of such exercise.
(b) The Company will be under no obligation to qualify Shares or to
cause a registration statement or a post-effective amendment to any registration
statement to be prepared for the purpose of covering the issuance of Shares,
provided that to the extent that the Company is obligated to do so pursuant to
any written agreement between the Company and another executive of the Company,
the Company also will be obligated to do so for the Employee to the same extent
that the Company is obligated to do so for such other senior executives of the
Company.
9. Adjustments. Subject to Section 8 of the Plan, in the event of
any change in the outstanding Shares by reason of an acquisition, spin-off or
reclassification, recapitalization or merger, combination or exchange of Shares
or other corporate exchange, Change of Control or similar event, or as required
under any Option Agreement, the Committee may adjust appropriately the number or
kind of Shares or securities subject to the Plan and available for or covered by
Grants and Share prices related to outstanding Grants and make such other
revisions to outstanding Grants as it deems are equitably required, provided
that, in all cases in which this Section 9 is applicable, the Employee's Options
will be adjusted in a manner consistent with adjustments made to the stock
options of the Company's other senior executives.
10. No Special Employment Rights. Nothing contained in this
Agreement will be construed or deemed by any person under any circumstances to
bind the Company or any of its subsidiaries to continue the employment of the
Employee for the period within which this Option may vest or for any other
period.
11. Rights as a Shareholder. The Employee will have no rights as a
shareholder with respect to any Shares which may be purchased upon the vesting
of this Option unless and until a certificate or certificates representing such
Shares are duly issued and delivered to the Employee. If at any time during the
term of the Option, the Company will be advised by its counsel that the Shares
are required to be registered under the Securities Act or under applicable state
securities laws, or that delivery of the Shares must be accompanied or preceded
by a prospectus meeting the requirements of such laws, delivery of Shares by the
Company may be deferred until a registration is effective or a prospectus is
available or an appropriate exemption from registration is secured. Prior to an
Initial Public Offering, the Employee will be required to enter into a
shareholder agreement with the Company prohibiting the sale, transfer or
assignment of the Shares without first offering the Shares to the Company and/or
certain other
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stockholders, on a form provided by the Company, upon the exercise of any Option
under the Plan.
12. Withholding Taxes. The Employee hereby agrees, as a condition to
any exercise of the Option, to provide to the Company an amount sufficient to
satisfy its obligation to withhold certain federal, state and local taxes
arising by reason of such exercise (the "Withholding Amount"), if any, by (a)
authorizing the Company to withhold the Withholding Amount from the Employee's
cash compensation, or (b) remitting the Withholding Amount to the Company in
cash; provided that, to the extent that the Withholding Amount is not provided
by one or a combination of such methods, the Company may at its election
withhold from the Shares delivered upon exercise of the Option that number of
Shares having a Fair Market Value equal to the Withholding Amount.
13. Execution of Shareholders Agreement. The Employee acknowledges
that, in connection with his prior or future purchase of Shares of the Company,
he has previously executed and delivered that certain Shareholders Agreement,
dated the date hereof, by and among the Company and the shareholders of the
Company named therein (the "Shareholders Agreement"). The Employee further
agrees that all Shares acquired by him upon exercise of the Option will be
subject to the terms and conditions of the Shareholders Agreement, as the same
may have been amended or modified in accordance with its terms.
14. Lock-Up Agreements. The Employee agrees that in the event of an
Initial Public Offering or any other offering of any securities of the Company,
if the Company so requests, the Employee will enter into an agreement on terms
and conditions satisfactory to the Company with the relevant underwriters of
such transaction that provides that the Employee may not directly or indirectly
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer the Shares or any other shares
of the Company's Common Stock or securities convertible into or exchangeable or
exercisable for such shares owned by the Employee, or enter into any swap or
other arrangement that transfers, in whole or in part, the economic consequences
of ownership of any such shares, for a period of up to one year after the date
of the relevant prospectus.
15. Delivery of Certificates. The Employee will have no interest in
the Shares unless and until certificates for the Shares are issued following
exercise of the Option.
*********
[Signatures on Following Page]
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OPTION AGREEMENT
Counterpart Signature Page
IN WITNESS WhEREOF, the Company has caused this Agreement to be
executed, by its officer thereunto duly authorized, and the Employee has
executed this Agreement, all as of the day and year first above written.
ORBCOMM INC. XXXXXX XXXX
By: _______________________________ /s/ Xxxxxx Xxxx
Title: --------------------------------
Name:
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EXHIBIT B -- GENERAL RELEASE
FOR AND IN CONSIDERATION OF the employment agreement to which this General
Release is attached, I, XXXXXX XXXX, agree, on behalf of myself, my heirs,
executors, administrators, and assigns, to release and discharge ORBCOMM INC.
(the "Company"), and its current and former officers, directors, employees,
agents, owners, subsidiaries, divisions, affiliates, parents, successors, and
assigns (the "Released Parties") from any and all manner of actions and causes
of action, suits, debts, dues, accounts, bonds, covenants, contracts,
agreements, judgments, charges, claims, and demands whatsoever ("Losses") which
I, my heirs, executors, administrators, and assigns have, or may hereafter have,
against the Released Parties or any of them arising out of or by reason of any
cause, matter, or thing whatsoever from the beginning of the world to the date
hereof, including without limitation, my employment agreement, my employment by
the Company and the cessation thereof, and all matters arising under any
federal, state, or local statute, rule, or regulation, or principle of contract
law or common law, including but not limited to, the Worker Adjustment and
Retraining Notification Act of 1988, as amended, 29 U.S.C. Sections 2101 et
seq., the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Sections 201
et seq., the National Labor Relations Act of 1935, as amended, 29 U.S.C.
Sections 151 et seq., the Family and Medical Leave Act of 1993, as amended, 29
U.S.C. Sections 2601 et seq., Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Sections 2000e et seq., the Age Discrimination in Employment
Act of 1967, as amended, 29 U.S.C. Sections 621 et seq. (the "ADEA"), the
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. Sections 12101 et
seq., the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.
Sections 1001 et seq., the Virginia Human Rights Act, as amended, Va. Code Xxx.
Sections 2.1-714 et seq., the Virginia Persons with Disabilities Act, as
amended, Va. Code Xxx. Sections 51.5-1 et seq., the New Jersey Law Against
Discrimination, as amended, N.J. Stat. Xxx. Sections 10:5-1 et seq., and any
other equivalent federal, state, or local statute; provided that I do not
release or discharge the Released Parties from any Losses arising under the ADEA
which arise after the date on which I execute this General Release, from any
obligations under the Employment Agreement to which this General Release is
attached which arise after the date on which I execute this General Release, or
from any Losses arising solely in my capacity as a shareholder of the Company.
It is understood that nothing in this General Release is to be construed as an
admission on behalf of the Released Parties of any wrongdoing with respect to
me, any such wrongdoing being expressly denied.
I represent and warrant that I fully understand the terms of this General
Release, that I have had the benefit of advice of counsel or have knowingly
waived such advice, and that I knowingly and voluntarily, of my own free will,
without any duress, being fully informed, and after due deliberation, accepts
its terms and sign the same as my own free act. I understand that as a result of
executing this General Release, I will not have the right to assert that the
Company violated any of my rights in connection with my employment agreement, my
employment, or with the termination of such employment.
I affirm that I have not filed, and agree to the maximum extent permitted
by law not to initiate or cause to be initiated on my behalf, any complaint,
charge, claim, or proceeding against the Released Parties before any federal,
state, or local agency, court, or other body relating to my
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employment agreement, my employment, or the cessation thereof, and agree not to
voluntarily participate in such a proceeding. However, nothing in this General
Release shall preclude or prevent me from filing a claim with the Equal
Employment Opportunity Commission that challenges the validity of this General
Release solely with respect to my waiver of any Losses arising under the ADEA.
I acknowledge that I have twenty-one (21) in which to consider whether to
execute this General Release. I understand that I may waive such 21-day
consideration period. I understand that upon my execution of this General
Release, I will have seven (7) days after such execution in which I may revoke
my execution of this General Release. In the event of revocation, I must present
written notice of such revocation to __________________ at the Company by
delivering such written notice to him at_______________________________________.
IF SEVEN (7) DAYS PASS WITHOUT RECEIPT OF SUCH WRITTEN NOTICE OF
REVOCATION, THIS GENERAL RELEASE SHALL BECOME BINDING AND EFFECTIVE ON THE
EIGHTH DAY (THE "RELEASE EFFECTIVE DATE").
This General Release shall be governed by the laws of the State of New
Jersey without giving effect to its conflict of laws principles.
______________________________ ________________________________
XXXXXX XXXX DATE
STATE OF _____________________ )
: ss.:
COUNTY OF ____________________ )
On the ___ day of ___________________ in the year 200__, before me,
the undersigned, personally appeared XXXXXX XXXX, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument, and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument
he executed such instrument, and that such individual made such appearance
before the undersigned.
_____________________________________
Notary Public
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